Bokaro And Ramgur Ltd vs The State Of Bihar And Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Writ Petition No. 19 of 1961

Decision Date: 14 March 1962

Coram: N. Rajagopala Ayyangar, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.N. Wanchoo

The case was titled Bokaro And Ramgur Ltd versus The State Of Bihar and Another and was decided on 14 March 1962 by the Supreme Court of India. The judgment was recorded by Justice N. Rajagopala Ayyangar and the bench also comprised Justices Bhuvneshwar P. Sinha, P. B. Gajendragadkar and K. N. Wanchoo. The petitioner in the proceeding was Bokaro and Ramgur Ltd while the respondents were the State of Bihar and an additional party. The judgment date is noted as 14 March 1962 and the citation for the decision appears as 1963 AIR 516 and 1962 SCR Supl. (3) 831. The principal issue concerned the fundamental right to hold property, especially when an adjudication as to title was pending, and whether an alleged infringement of that right could arise before the adjudication was completed. The relevant constitutional provisions were Articles 19(1)(f) and 31(1) of the Constitution of India, and the statutory provision involved was Section 4(h) of the Bihar Land Reforms Act, 1950 (Bihar Act 1 of 1950).

The property at the centre of the dispute was a plot of land situated within the municipal limits of Hazaribagh, together with certain buildings and structures on that land. The land originally belonged to the Raja of Ramgarh. On 16 January 1948 the Raja executed a lease of this property to an individual identified as “N” for a term of ninety‑nine years. Subsequently the Raja settled his reversionary interest in the land for the benefit of a trust. The estate of Ramgarh was later notified under Section 3(1) of the Bihar Land Reforms Act as being to be taken over by the Government of Bihar, and as a result the estate was statutorily vested in the State of Bihar. A notice under Section 4(h) of the Act was served on “N” requiring him to show cause why the lease in his favour should not be set aside, the notice stating that the lease had been executed within the period stipulated by Section 4(h). “N” objected, arguing that the property in question was not covered by Section 4(h). While the enquiry was pending, “N” surrendered his leasehold to the trust. The trust then leased the property to another party, who subsequently assigned his interest in the property to the petitioner company. The petitioner sought to quash the proceedings initiated under Section 4(h) that were before the Collector, where an enquiry was being conducted to determine how the property had been enjoyed by the Raja of Ramgarh before the lease of ninety‑nine years was effected. The central question presented to the Court was whether any of the petitioner’s fundamental rights had been infringed by the continuation of that enquiry. The Court held that a party could not claim infringement of the fundamental right to hold property unless it first established that it possessed a title to the property. If the title itself was in dispute and subject to adjudication in a legally constituted proceeding, the party could not invoke a right based on that title until the adjudicative process resolved the title. Only after the enquiry determined the title could the question of whether the party’s rights in or to the property had been improperly or illegally infringed be properly considered.

In this case the Court recorded that the proceeding was a writ petition numbered 19 of 1961, filed under article 32 of the Constitution of India for the purpose of enforcing fundamental rights. The petitioners were represented by counsel A V Viswantha Sastri and D N Mukerjee, while the respondents were represented by counsel Bajrang Sahai and S P Yarma. The petition was dated 14 March 1962, and the judgment was delivered by Justice Ayyangar. The Court stated that the petition did not contain any viable claim of infringement of a fundamental right and therefore was entirely without merit. Consequently the Court concluded that the petition should be dismissed as misconceived. The principal relief sought by the petitioners consisted of a writ of prohibition intended to prevent the Collector of Hazaribagh from continuing an enquiry that was pending under section 4(h) of the Bihar Land Act, together with a writ of certiorari to set aside those proceedings. The Court noted that the petitioners alleged that their fundamental rights under article 19(1)(f) and article 31(1) of the Constitution had been infringed with respect to a specific parcel of land situated within the municipal limits of Hazaribagh in Bihar, together with certain buildings and structures standing thereon. The land in question had originally been owned by the Ramgarh Raj, and a dispute existed concerning the manner in which the property had been occupied by the erstwhile proprietors; the Court therefore refrained from expressing any view on that dispute at this stage.

The Court then turned to the historical facts concerning the title to the property. On 16 January 1948 the Raja of Ramgarh granted a lease of the land to his younger brother, Basant Narain, for a term of ninety‑nine years. Subsequently, on 7 April 1949 the Raja settled his reversionary interest in the same property for the benefit of a trust, executed by a registered deed of settlement. The estate of Ramgarh was thereafter notified under section 3(1) of the Bihar Land Reforms Act (Bihar I of 1950) as being taken over by the Government of Bihar, and as a result the estate vested statutorily in the State effective 3 November 1951. Section 4(h) of the Bihar Land Reforms Act empowers the collector to make inquiries into any transfer, including settlement or lease, of any land that forms part of such an estate, or any interest in a building used primarily as an office or “kutcbery” for the collection of rent of the estate, where the transfer was made after 1 January 1946. If the collector is satisfied that the transfer was intended to defeat any provision of the Act, cause loss to the State, or secure a higher compensation, the collector may, after giving reasonable notice to the parties, hearing them, and obtaining prior sanction of the State Government, annul the transfer, dispossess the claimant, and take possession of the property on terms that the collector deems fair and equitable.

The lease in question was dated 16 January 1948 and therefore fell well within the period prescribed by the provision. The State asserted that the buildings covered by that lease were being used by the Raja chiefly as an office or kutcheri for the purpose of collecting rent. That assertion was contested, and the question of the actual use of the buildings formed a material point of dispute in the proceedings that are now sought to be set aside. On 27 November 1955 a notice was served on Basant Narain requiring him to show cause why the lease executed in his favour on 16 January 1948 should not be set aside under the power granted to the Collector by section 4(h). Basant Narain responded by filing objections and contended that the leased premises were not within the scope of section 4(b). Before the enquiry could be completed, Basant Narain transferred his leasehold interest to the assignee of the reversion, identified as the Trust, by a registered deed dated 1 January 1957. Subsequently, on 1 June 1959 the Trust, having become the holder of the entire interest in the property, granted a lease of the premises to a person named Bansidhar. Approximately one month later, on 3 July 1959, Bansidhar assigned his leasehold interest to the petitioner company, thereby bringing the petitioner into the transaction. On 13 November 1959 the Collector issued an order cancelling the lease. The petitioner, who claimed title to the property by virtue of the assignment dated 3 July 1959, applied to the Collector to set aside that cancellation order both on its merits and on the ground that the order had been passed to its prejudice without affording it an opportunity to be heard, even though by that date the petitioner had obtained title and therefore possessed locus standi. The Court notes that the correctness of the petitioner’s contention is not presently before it, because the State of Bihar subsequently set aside the Collector’s cancellation order, directed a fresh enquiry, and, during that re‑enquiry, the petitioner filed a petition before the Collector on 9 August 1960 setting out its case. It was while this latest enquiry was in progress that the petitioner approached this Court by the present petition for the reliefs previously outlined.

The Court further observes that the constitutional validity of section 4(h) is not challenged; consequently the dispute turns on whether the property satisfies the conditions that would attract the operation of that section. The petitioner’s relief is premised on two separate allegations. First, the petitioner claims that the land on which the buildings stand is raiyati land and therefore cannot be taken over by the State under the Bihar Land Reforms Act. Second, the petitioner alleges that the buildings were originally used for the residential purposes of the Raja and his family and not as a kutcheri. The enquiry into these factual matters has been proceeding before the Collector.

With respect to the two matters raised by the petitioner, the Court observed that when the petitioner had moved the Court seeking a stay of the proceedings before the Collector, the Court issued an order that allowed the enquiry to proceed while simultaneously staying any order that might be issued by the State Government. The Court explained that if the State’s contention were to be proved – namely, that the tenure of the land was such that it fell within the provisions of the Bihar Land Reforms Act and that the buildings on the land were being used for the purpose asserted by the State – then the State would acquire a valid title to the property and the petitioner would have no legitimate grievance. Conversely, the Court noted that should the petitioner be able to establish, through the enquiry, the factual position set out in its petition, the petitioner would be entitled to succeed. Accordingly, the question of whether the petitioner possessed any right to the property depended entirely on factual determinations that lay within the jurisdiction of the authorities created under the Bihar Land Reforms Act. The Court further stated that before a person could complain of a violation of the fundamental right to hold property, that person must first prove that he actually held title to the property. When the title itself is disputed and is the subject of adjudication before a legally constituted proceeding, the person cannot maintain a claim based on that title until the enquiry resolves the issue and confirms the title. Only after such a determination could the person examine whether his rights in the property have been improperly or illegally infringed. In view of these considerations, the Court concluded that the petitioner was not able to demonstrate any infringement of its fundamental right that would justify the filing of a petition under Article 32. Consequently, the petition was dismissed with costs, and the dismissal order was entered.